Eastman Kodak has reported financial results for the fourth quarter and full year 2017, delivering net earnings for the year of $94 million on revenues of $1.5 billion and continued growth in key product areas.
Highlights Include:
2018 Guidance
“2017 was a year of investment in our strategic growth priorities which bodes well for the future,” said Jeff Clarke, Kodak CEO. “We also eliminated several business initiatives while continuing to reduce cost and drive greater efficiency in the company. We enter 2018 with a stronger growth profile and more productive operations.”Revenues for the full year 2017 were $1.5 billion, down 7% from 2016. The revenue decline was driven by volume and pricing declines within the company’s commercial print business and volume declines in the company’s consumer inkjet and industrial film and chemicals businesses.
The company’s cash balance was $344 million at the end of 2017, compared with $434 million at the end of 2016. The company used cash to invest in strategic growth businesses, fund working capital needs, meet legacy cash obligations and service and prepay debt.
“Our use of cash in 2017 included meaningful investments in the Ultrastream inkjet platform, Flexcel NX packaging, Sonora X plates, advanced materials and brand licensing which will contribute to growth,” said David Bullwinkle, Kodak CFO. “In the fourth quarter of 2017, we reprioritized our investments to focus on shorter payback periods and reduced costs which will improve our ability to generate cash in 2018 and beyond.”
Print Systems Division (PSD), Kodak’s largest division, had Q4 revenues of $261 million, a 6% decline compared with Q4 in 2016. Operational EBITDA for the quarter was $16 million, compared with $39 million for the same period a year ago. Print Systems Division had full-year 2017 revenues of $942 million, a 7% decline compared with 2016. Full-year Operational EBITDA was $58 million, a decline of $48 million compared with the prior year. The decline was due primarily to industry pricing pressures, higher aluminum costs and an overall commercial print industry slowdown.
PSD’s environmentally-advantaged Kodak Sonora Process Free Plates had continued strong performance, delivering 21% year-over-year growth in unit sales. Sonora Plates now account for 19% of the division’s total plate unit sales.
Enterprise Inkjet Systems Division (EISD), including the Kodak Prosper and Kodak Versamark businesses and the investment in Ultrastream inkjet technology, had fourth-quarter revenues of $39 million, down from $43 million in the same period in 2016. Operational EBITDA was $3 million, an increase of $1 million compared with the fourth quarter of 2016.
For the full year 2017, EISD revenues were $144 million, compared with $166 million in 2016. Operational EBITDA for the full year 2017 increased by $21 million from 2016 to $5 million in 2017. The results reflect the positive impact of cost control actions and continued strong growth in Prosper annuities.
The company continues to invest in the development of Kodak Ultrastream, the next-generation inkjet writing system, which is scheduled for launch in 2019.
Flexographic Packaging Division (FPD) includes Kodak Flexcel NX systems and plates, as well as other packaging businesses, such as analog flexographic plates and letterpress plates, proofing products and services. Revenues for Q4 were $41 million, up $7 million compared with the same period a year ago. Operational EBITDA for Q4 was $10 million, an improvement of $3 million compared with the fourth quarter of 2016.
For the full year 2017, revenues were $145 million, compared with $132 million in the prior year, or a 10% improvement. Full-year Operational EBITDA of $31 million is an improvement of $7 million compared with the prior year.
Flexcel NX products continue to deliver strong growth. Year over year, Flexcel NX plate volume increased 13% for the quarter and 17% for the full year. The division continues to invest in new product development and infrastructure, including a total investment of $16 million to build a plate manufacturing line.
